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Rdio launches free service with ads from broadcast partner Cumulus

Cumulus + RdioYesterday streaming music service Rdio announced that radio station streaming would be free on Android and iOS mobile devices, effective immediately. Up to now the service has been subscription only, with a free trial period available for new users.

Like Spotify, Rdio’s emphasis has been on demand listening. The service’s stations were only just launched in August.

Rdio’s new free service will be underwritten by ads provided by its new partner, Cumulus broadcasting, though stations are ad-free right now. While the deal lets Rdio get into the ad-supported model without rolling out its own sales department, it also lets Cumulus move more aggressively into the online and mobile radio space without having to build its own platform.

As the second largest owner of radio stations in the US Cumulus also seems to be perpetually trying to catch up to #1, Clear Channel. That company has made a big play to capture the online and streaming audience with its iHeartRadio platform, which merges broadcast streams from a range of commercial and non-commercial broadcasters–including Cumulus–with online-only stations. I suspect the Rdio deal may be a way for Cumulus to test the waters in mobile streaming without the huge commitment of developing its own platform.

As of late Cumulus has been slowly renegotiating or cutting some ties from Clear Channel, while cutting costs. At the end of August the company struck a new deal to carry Rush Limbaugh’s program–syndicated by Clear Channel’s Premiere Radio Network–for three more years on its stations. But just a week ago Cumulus announced that it would drop Premiere’s Sean Hannity show in favor of Michael Savage’s Savage Nation, which had been absent from terrestrial airwaves since September 2012 when he won a legal battle with syndicator Talk Radio Network.

Will the Savage Nation get its own channel on Rdio sometime in the future? (shudder)

The Rdio-Cumulus deal, then, might be seen as a cross-sector consolidation that increasingly shouldn’t be seen as cross-sector. It’s come time that terrestrial broadcasters cannot afford not to have their own online and mobile platform, delivering more services than just live streams of their broadcast stations. The reality they’re waking up to is: it’s all radio.

What remains to be seen is if Rdio will attempt to create advantages beyond ad sales from its Cumulus deal. Think of how Pandora is trying to break into broadcast as a ploy to reduce its royalty rates.

I’m checking out Rdio’s free mobile streaming right now, and will give it a fuller review soon.


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